County Votes for Tax Relief to Aid Plant Expansion
The Fayette County Commissioners Court voted 4-1 Thursday to approve a 10-year property tax abatement agreement with Perdue Farms for a plant expansion in Schulenburg.
Perdue owns and operates a pet treat manufacturing plant located at 1315 Russek St. in Schulenburg. The company plans to expand operations. Back in December, Perdue asked the County for a property tax abatement to help offset the cost of the multi-million dollar expansion.
Since then, officials from the County and Perdue negotiated a deal which they presented at a public hearing Thursday evening, May 20. As part of the deal, Perdue promises to invest at least $3 million in the plant expansion. In addition, the company promised to hire at least 28 new jobs. The plant currently employs 95 workers. Perdue agreed to complete the plant expansion by Dec. 31 of this year.
The agreement signed Thursday does not stipulate minimum wages for the new employees. At a meeting back in March, Perdue Farms official Bryan Johnston told Commissioners that wages would start at $15 an hour and some salaried positions would pay as much as $65,000 a year.
In exchange, the County granted a tax abatement on new improvements to the property. The existing real estate and improvements will remain taxed at the full rate. Taxes on the new improvements will be abated at 100 percent in the first four years. In the next three years, those taxes will be abated at 90 percent. The abatement amount will drop to 80 percent in the final three years.
“The County is going to get taxes one way or the other,” said County Judge Joe Weber. “What appealed to me about this is the fact that it is creating at least 28 good-paying jobs with benefits.
“In the last abatement, we didn’t really have that,” Weber said, referring to the 7V Solar Farm tax abatement that Fayette County Commissioners approved last year. Candela Renewables, the owner of the Muldoon-base solar farm, plans to invest $150 million in the renewable energy project, but the solar farm does not expect to generate many permanent jobs.
The abatement for 7V Solar Farm starts out at 75 percent in the first year and drops by five percent every other year, ending at 55 percent in year ten.
Pct. 3 Commissioner Harvey Berckenhoff, who later cast a dissenting vote against the abatement, asked Johnston at last Thursday’s meeting whether Perdue would be able to find workers to fill the positions.
“Realistically, no one is going back to work,” Berckenhoff said.
Johnston said he was confident the company would find enough workers. He said Purdue has already hired five new employees in anticipation of the expansion.
“We’re already advertising for these positions,” Johnston said.
Moreover, the abatement applies only to Fayette County property taxes. The company will pay property taxes to the City of Schulenburg and Schulenburg ISD at the full rate on all new improvements.
“The county is going to continue to get at least what you’ve been getting in taxes now,” said La Grange Subway owner Tom Hudson, who was the only member of the public besides the press who asked questions at Thursday’s public hearing. “The real winner is the school district.”
According to figures presented at the meeting, property taxes paid from Perdue to Schulenburg ISD is expected to more than double over the next 10 years. Without the expansion, the property would generate an estimated $319,295 in school taxes over the next 10 years. With the expansion, the school should realize $795,060 in taxes from the property over 10 years.
Commissioners voted on two items to approve the abatement. First, they voted unanimously to designate the Purdue property in Schulenburg as a “reinvestment zone.” When the actual abatement agreement came up for a vote on Thursday, Berckenhoff opposed it. After the meeting, Berckenhoff explained his vote:
“I am in favor of the Perdue expansion and the abatement,” Berckenhoff said. “What I am not in favor of is the percentage of the abatement and the fact that we got the paperwork showing the commissioners the agreement that they were proposing 15 minutes before the meeting started.
“Plus, I felt like Commissioner (Drew) Brossmann should have sat in the meetings with Perdue when the negotiations were being discussed,” Berckenhoff said. “It is in his Precinct. I voted on the reinvestment zone but against the abatement hoping that we could renegotiate the percentage.”
County Judge Joe Weber and Assistant County Attorney Blake Watson negotiated the agreement with Perdue.
Separately from the County, the Schulenburg Economic Development Corporation (EDC) agreed to provide a $100,000 grant to Purdue Farms as an incentive for the plant expansion. Terms of that grant stipulated that Perdue will employ at least 25 new workers over the next two years.